When most people imagine a corporate boardroom, they envision a few things: people over the age of 50; mostly male; focus on finances; insularity. Whether directors are young, older, male, female, industry experts, financial experts or otherwise, good governance requires both experience and open-mindedness, knowledge and curiosity, confidence and skepticism. Good leaders, whether executives or directors, have in common their ability to use their experience, knowledge and confidence without over-using it.
Last week, I saw many examples of this. I was an invited speaker at the Master Class, a program of the National Association of Corporate Directors, the preeminent organization for directors and boards in the US. This is a small conference, as meetings like this go, and the attendees had the opportunity to interact with one another and with presenters. The collective intelligence amongst the attendees is impressive as is their success and stature. They are, as a group, quite rightly confident, enough so to spend time with peers from a range of industries and different types of companies. Why? Learning. For learning to happen most effectively, a mindset of both confidence and openness is required.
These are a few things I noted amongst the attendees that can benefit anyone.
- Distractions aren’t necessarily a waste of time. Even smart leaders can get sidetracked by novelty, or as my clients often say, “shiny new objects.” A confident leader knows that such detours can be valuable, even if how they are valuable is not immediately obvious. They also trust themselves to extract value from what others may deem useless.
- Studying trends is more valuable than fixating on a single example of a single trend. The gig economy, for example, is a bigger idea than Uber.
- Assumptions are deadly but it’s tough to see our own. We often need help, but can’t access it if we are over-confident.
- It’s much easier to see the assumptions of others and take comfort. But looking at other businesses can prime our thinking. Too often, we look at case studies too literally and specifically, failing to turn the lessons on ourselves.
- New information, ideas, and people who are different are not threatening. Leaders who allow themselves to experience novel ideas, people and places learn more and do so more easily than those who isolate and insulate themselves.
- Blueprints and playbooks for deals are helpful guides but too often they are used in a mechanical way that, counter-intuitively, increases risk. M&A requires leadership judgment, understanding organizations from a systemic point of view and a willingness to learn constantly and in a variety of ways, including experientially.
Mergers and acquisitions are high-stakes events in the life of a company. Leaders, both board members and executives, tend to be far too confident about the outcomes they will achieve, even in the face of the extra-ordinarily high fail rate (estimates range up to 80%). Many leaders overcome this cognitive dissonance with over-confidence, a leading cause of failed deals and one I discuss in my book High-Stakes Leadership.
In the meeting with directors, they shared stories of triumph and failure. This, in itself, indicates a learning mindset. It is possible when people have privacy and trust with people they regard as peers. What are you doing to create this environment in your organization? How do you create it for yourself?